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Investing with Gusto
07 June, 2019

The opening in March of the Dover-based Hammond Group's stunning Three Elm site at Tonbridge in Kent, was another step in an ongoing programme of development and investment for the business. The former rather outdated site closed in August and was replaced with a £2m shiny new BP-branded forecourt and two-storey shop featuring 280sqm of sales space on the ground floor, with offices, kitchen and meeting room upstairs built around a glass atrium giving a fantastic view down to the shop. The site also features an in-store bakery, Hammond's own food-to-go brand Café Gusto with a serve-over offer including hand-made Italian products and Lavazza coffee.

The group is moving all of its six BP sites from Spar to the Southern Co-op's Welcome franchise over the next six months, and Three Elm is the second to make the transition following Dover South in mid-January.

"Our vision is to ensure we future-proof ourselves by diversifying into good convenience outlets, with a good range and good prices," explains director John Ryeland, whose grandfather Henry bought the 251-year-old business in 1924 as an MBO he was an employee and there were no family members to take it on. John's cousin James is a divisional director of the marine and deep-sea pilotage side of the business.

"As the fuel market becomes diluted to some extent going forward, and the advent of electric vehicles becomes stronger, we want to have a stable-based platform and hopefully become the destination of choice. In every situation where we have redeveloped a site we have gained volume; so in a typically flat market, having redeveloped Three Elm we're already seeing 8% growth in fuel volume year-on-year. In the shop we are seeing anywhere between 38% and 65%!"

green belt challenge

John always knew developing the Three Elm site would be a bit of a challenge because of the green belt. It sits on a huge plot of land, and the original plan to create a store of about 450sqm with concessions, was rejected by the neighbours. It took two efforts over 18 months to get the planning sorted, the solution being an upper floor which was not without its challenges, particularly around fire-proofing. "We ended up with a double-storey building, which was no higher than the original building which had a high, peaked roof (we've now got a flat roof)," explains John. "We couldn't go outwards, so we went up. And we've created more than double the space 2.5 times the size of the original store. It was fun, but challenging in that the upper floor is suspended from the roof but it means there are no posts downstairs, giving us total flexibility with the layout."

About two years ago the group underwent a strategic review of its stores. "It probably took us 18 months before we reached the decision to move our entire estate across to the Southern Co-op," says John. "It was a big decision. Spar had done us proud for many years since 2002.

"There've been a number of people who have trialled with the Co-op amid rumours of difficult relationships. Our experience with Southern Co-op is very different.

"The support has been fantastic. We have access to the full Co-op range, but we have certain freedoms that enable us to still have that entrepreneurial flair, to incorporate a local range where it's not in conflict with the Co-op.

"We have planograms, but also the freedom to structure more for a forecourt operation. Price and perception were key aspects. We now have the power of the Co-op brand which people can trust, particularly in fresh meat and produce, plus all the promotional activity is really important. The Co-op has ethical standards it buys British where possible. All of this reassures the customer and gives us great strength."

Without any marketing the site has attracted a very different demographic, with previously quiet weekends now as busy as previously during the week. "It's a very different mission here now Sunday roast, full breakfast. Customers can get everything they want here," says John.

Another key development has been the creation of Cafe Gusto, not just for commercial reasons and to differentiate from other food-to-go offers, but also to engage with the consumer, tempting them to try and buy. "Our ethos has been about restoring service to the consumer," says John.

"This is very different to what the market is doing with self-scan. Our coffee is a serve-over solution which stops people walking out without paying; plus the machines are better kept. The whole image is about creating a customer-interfacing offer."

The baking facility has opened up the opportunity for an all-day solution to hot food great for the group's 24-hour sites at Thanet Way and Dover. Products are batch-baked, and can be chilled for up to 48 hours; but be re-generated to 80deg-plus heat within minutes. There is less waste and always an enticing display.

As the Hammond Group invests around £3-400k on each store redevelopment and considers other initiatives, it planning for significant growth to secure its place in the future.


Hammond Group

1924: George Hammond plc's grandfather Henry bought the 251-year-old business as part of an MBO
1972: The company entered into petrol retailing. At one stage it ran up to 15 sites, a combination of co-owned and dealer sites. The philosophy of the business was to invest in its asset portfolio to acquire freehold sites. It now owns six sites
1986: John Ryeland joined the family business, and spent eight years running the group's transport operation
2009: John took over the retail side of the business when the company's former MD Brian Madderson left and became chairman of the PRA


Following a deal agreed with Harvest Energy, do you think it will be good to see the Total brand returning to UK forecourts?